Costs on applications to set aside statutory demands do not automatically follow the event. The focus is on the reasonableness of the creditor's decision to issue the demand, analogous to costs on failed summary judgment applications. Creditors should be positively satisfied that there is no genuine dispute and that the debtor is insolvent before issuing a statutory demand; using statutory demands as a debt recovery mechanism risks adverse costs orders. However, where the appearance of a genuine dispute was procured by false testimony, the applicant may also be denied costs.
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